The Perth property market sees average ups and down in prices. Experts in the property market believe that the downturn looks unstable. Property price index exposed that property prices declined, and the intensity of this fall is lower than the previous quarter. Consequently, they are hopeful of getting the market potential back in the coming quarters. Even Sydney and Melbourne property markets showed a recent upturn, as prices increased by 3.6%. 1.2% decline created media hype in the country, and experts are trying to figure out some root causes. Housing market commentary in Australia has swung from pessimistic to optimist recently. When considering buying, selling or investing, there is a need to see a clearer picture to contemplate further trends in the market. Perth property advice can be acquired from property managers.
Rise and Fall of Perth Property Market
Perth’s property market was at its peak in mid-2014. Promptly, it has become one of the cheapest property markets due to its recent decline in prices. Expensive areas in Perth still exist, which contribute to high property prices. However, demand for the suburbs has increased, and it is a massive concern for mortgage payers. The strong force causing this noticeable decline is the economy. The recent interest cut by the Australian Reserve Bank caused the difference. Conversely, Labor failed to manage new tax rules.
The market is still in doldrums, and the Reserve Bank of Australia has to do something to get the prices back. The downward trajectory cannot be afforded by corporations and government, as far as the future of the market is concerned. People avoid buying and selling property in this declining market. Due to limited transactions and buying, the furniture market can also be affected, as well as other retail markets. Thus, the decline in the market is also interrelated with other industries as well. For instance, it is also associated with the motor vehicle industry. People often have to buy a car when renegotiating the mortgage.
Causes, Threats & Mitigation
Limited housing turnover is evident in Perth, and it is one of the pre-eminent reasons for these economic woes. The soft population is also a key reason, which makes Perth’s property market different from others. Over-supply in the market has also been acknowledged as a crucial goal, which still looks ostensible. Instead of waiting for the rise in population growth to manage the supply, some new initiatives are to be taken. Population growth may take time, as it may take months or years. The current drop is enough to question the reliability of the market.
The threat to job creation is also in the spotlight. Nevertheless, by taking the initiative regarding population growth and managing supply and demand adequately, the hope for the rise is apparent. The next 12 months are crucial for this market, as the property market can return to a state of growth. Guy Debelle, deputy for RBA, believed that the increasing mortgage stress is the leading cause of this downturn. People are showing reluctance in buying and selling properties or houses. Even arrears of mortgage can become worse due to this critical factor. Perth property management services can assist in information regarding the property market.
Interestingly, apart from this particular market, unemployment and outward migration are also significant issues. People are looking at new options now, and the future of the market is in jeopardy. Of course, with increasing income level, a rise in employment, and strong inward migration, the market can regain potential. Hence, instead of just focusing on mortgage stress, authorities should work on employment, income levels, and inward migration. People’s credibility to regain the capability of buying and selling a property must be backed, and it is the only way to save Perth from further property decline. Perth still has space to accommodate people. Managing supply and demand is also a critical move to make a difference. The Government and Reserve Bank of Australia have to play their role to get things back on track.